BoG Keeps Policy Rate At 14.5%

Dr. Ernest Addison 

The Bank of Ghana (BoG) has maintained the monetary policy rate at 14.5 percent.

The policy rate is the rate at which the Central Bank lends money to commercial banks.

Addressing the 95th Monetary Policy Committee press conference on Monday, July 27, 2020, Governor of the Central Bank, Dr Ernest Addison says
“the Committee was of the view that the current extraordinary circumstances, with a widened budget deficit and a residual financing gap, would require some monetary restraint to preserve the anchors of macroeconomic stability.”

He added that “In the circumstances, the Committee decided to maintain the policy rate at 14.5 percent.”

The Bank of Ghana’s latest forecast shows that inflation is currently above its upper limit, driven mostly by food prices, he indicated.

The Governor observed that adjusting for the unusual noise in the food inflation, the indications are that underlying inflationary pressures are stable.

The Bank projects a return of inflation to the medium-term target band by the second quarter of 2021, conditional on corrective fiscal measures being introduced in the near-term, he said.